Dollar Troubles
Tue, Jul 15 2008, 12:23 GMT
by Andrei Pehar
The Dollar is taking quite a beating today - with more uncertainty over the long-term future of Freddie Mac and Fannie Mae. Both the Nikkei and the Hang Seng index dropped severely in overnight trading, when it came out how heavily some leading Asian banks had been vested in US mortgages. The Bank of Japan left their key overnight rate unchanged at 0.50%.
The UK consumer price index came in larger than expected (3.8% vs. 3.3% last month, 1.6% vs. 1.5% for the core) - officially giving us the worst inflation on record. ZEW economic sentiment came in worse than expected for both Germany (-63.9 vs. -55.5) and for the EU as a whole (-63.7 vs. -56.0). Currently Most European indexes are down by 100 points or more, with Italy's MIB (-724) and Spain's IBEX (-354) taking the worst hits.
All eyes now turn to the US news due out at 12:30 GMT. We will be getting the producer price index (forecast at 1.3%, 0.3% for the core), retail sales (forecast at 0.4%, 0.9% for the core), and the Empire State manufacturing index (forecast at -7.7) all at the same time. More US news will follow at 14:00 GMT. Prior to open, Dow futures are currently at -122, well below the 11,000 mark. Both Bernanke and Paulson will be testifying on Capitol Hill today.In addition, Canada will be announcing new motor vehicle sales at 12:30 GMT, and the Bank of Canada will announce their new overnight rate at 13:00 GMT (widely expected to remain unchanged at 3.00%).
